Chrysler-Badged Nissan Versas

Deal will see Nissan build Versa-based small cars for Chrysler to sell in South America.

Starting next year, Chrysler will have its own version of the Nissan Versa subcompact B-segment car running around select regions of South America, thanks to a new partnership between the two automakers announced on January 11.

Nissan will use excess capacity at its Mexican assembly plant to make additional cars for Chrysler. They will be sold as 2010 models in a number of body styles. And while we expect them to carry Dodge branding, Chrysler LLC president Tom LaSorda won’t confirm which badge they will carry, how much differentiation there will be from the Versa, or what kind of volume is targeted (although some reports peg it at 20,000 a year). And if Chrysler has chosen a name, LaSorda isn’t spilling the beans yet.

Chrysler gains immediate access to new segments in which it does not compete, as its deal with Chinese automaker Chery will not yield B-cars for North America for three or four years, despite efforts to accelerate the timeline with Chrysler resources allocated to the project.

Chery Still Will Supply Small Cars for North America

It is the Chery small car that eventually will be sold in North America, not a Nissan, LaSorda confirms in a conference call, noting that Nissan doesn’t want to build a competitor to its own car in the U.S.

The Nissan deal will help Chrysler grow in South America, where its sales were up 22 percent in 2007, LaSorda says, as part of efforts to expand internationally, something the automaker needs to do now more than ever in the wake of the DaimlerChrysler divorce that left it very NAFTA-centric.

With relationships with both Nissan and Chery for subcompacts, Chrysler is working to sell the tiny vehicles in numerous regions, with Asia, Latin America, Eastern Europe, and North America likely served by Chery-built Dodge products, while South America benefits from the Versa-based car. Western Europe is also targeted to get subcompacts. To develop and build a new B-car from scratch would have cost Chrysler in excess of a billion dollars, LaSorda says.

This is not the first time Chrysler has hopped into bed with Nissan, as the two already have a partnership in which Chrysler sources continuously variable transmissions from Nissan affiliate Jatco.

LaSorda evades questions about rumors that Chrysler, in return, could build large pickups for Nissan, replacing the Nissan Titan with a Ram-based truck. Nissan also has a deal to supply Suzuki with compact pickups, and Chrysler makes similar-sized pickups for Mitsubishi.

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